Why Trump’s Trade Policies Would Be Bad For The Fashion IndustryDec 16, 2016

Mere weeks remain before President-elect Donald Trump is set to take his post as the 45th president of the United States and, in the interim, leaders across every industry are weighing the implications of what is expected to be a presidential run comparable to none other.

Where footwear and apparel are concerned, Trump’s trade rhetoric continues to top the list of major concerns for the industry’s executives. On Sunday, the soon-to-be commander in chief doubled down on comments that he made via Twitter stating that he would impose a 35 percent tariff on the imports of firms that move their production outside of the U.S.

“There’s a 35 percent tax, but there is no tax if you don’t move,” Trump said in a conversation with Fox News anchor Chris Wallace. “But if you move your plant or factory and you want to sell back into our country — [and you’ve fired] all your people — there are going to be consequences for that. There are going to be consequences.”

While the president-elect ran a predominantly anti-trade campaign for more than a year — his plans to exit the Trans-Pacific Partnership are well-documented — his latest comments have struck a chord with some footwear and apparel trade organizations.

“I don’t know how you apply a trade tariff to a single company and have it be constitutional,” explained Matt Priest, president and CEO of the Footwear Distributors and Retailers of America. “Our global trade system is so complex and interlocked that I find it hard to believe that there will be an appetite for applying a 35 percent tariff on a company that imports products —whether they left this country or not.”

Trump says that such a tax would help Americans by keeping companies and jobs in the country, but Priest believes the tax will do just the opposite.

“What President-elect Trump won’t admit is that the American consumer will pay that 35 percent tax,” Priest said. “So it won’t hurt the company or the importer — they’ll figure something out — but the consumer will be left holding the bag.”

For his part, Stephen Lamar, EVP of the American Apparel & Footwear Association, said he also believes that consumers will pay a portion of the consequences for Trump’s punitive tariffs, but he also sees far-reaching implications for innovation and growth at U.S. firms.

“Our industry has been global for more than a generation now. We employ about a million in the United States and those people are dependent on global supply chains — it’s what makes the footwear industry competitive,” Lamar said. “[A 35 percent tariff] would hurt U.S. companies and their workers to the extent that those tariffs get absorbed as extra costs in the supply chain, which deny the ability of companies perhaps to invest in [research and development] or to expand and hire more workers.”

What’s more, Lamar noted, footwear industry tariffs are already among the highest on any import.

Lamenting aside, both Lamar and Priest said it may still be too early to tell how — or even if — Trump’s rhetoric will actually translate into policies once he takes office.

“It’s hard to understand specifically what he means at this juncture — which is totally normal for a [president-elect],” said Priest. “I suspect that with a Republican-controlled Congress, you’ll see that many of the details — as far as policies are concerned — will be left to Congress and to those chambers.”